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    Home » Broadcasting and Media » Huya to buy DouYu to create Tencent-owned game-streaming giant

    Huya to buy DouYu to create Tencent-owned game-streaming giant

    By Agency Staff12 October 2020
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    Fredrick Tendong/Unplash.com

    Huya has agreed to buy DouYu International Holdings in an all-share deal that will create a Chinese game-streaming giant with a market value of more than US$11-billion.

    Investors have been offered 0.73 American depositary shares of Huya for each ADS of DouYu, the companies said in a statement on Monday. That values DouYu’s ADSes at about $18.83 apiece as of Friday’s closing price, a 35% premium, and values the company’s equity at about $5.98-billion.

    Tencent Holdings, which currently owns stakes in both companies, will hold about 68% of the merged business’s voting shares, giving the WeChat operator control over a live-streamed gaming leader akin to Amazon.com’s Twitch. China’s game-streaming market is estimated to generate 23.6-billion yuan ($3.5-billion) in revenue this year, according to iResearch. The country’s streaming networks live and die by the popularity of star players and the virtual tips and gifts that fans buy for them, leading to intense bidding wars for the most recognised names.

    Tencent will hold about 68% of the merged business’s voting shares, giving it control over a live-streamed gaming leader akin to Amazon’s Twitch

    The boards of both companies have unanimously approved the deal, which is expected to close in the first half of 2021 if investors holding two-thirds of DouYu’s shares vote in its favour.

    Tencent will assign interests in its live-streaming business, Penguin e-Sports, to the newly merged company for $500-million, the companies said. The Tencent deal is expected to close concurrently with Huya and DouYu’s combination.

    Tencent and DouYu’s CEOs, Shaojie Chen and Wenming Zhang, have agreed to tender their shares and ADSes, which represent about 54.6% of the voting rights. Chen and Rongjie Dong, the CEO of Huya, have also agreed to transfer shares to Tencent before the deal closes.

    Huya has also agreed to pay a dividend of about $200-million, and DouYu agreed to pay its investors $60-million, within 20 days of the deal closing.  — Reported by Amy Thomson, (c) 2020 Bloomberg LP



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